Millennials’ Willingness to Adopt Robo-Advisory Services: Role of Financial Knowledge, Usefulness and Trust

Abstract

Robo-advisors have emerged as a modern approach to personal financial management and investing, but their acceptance among millennials—a tech-savvy generation—is uneven. Robo-advisors are recognized as a disruptive trend in wealth and asset management worldwide. Globally, their use is growing rapidly, and their adoption increased during the COVID-19 pandemic as more people opened accounts for digital investment services. This study uses the Technology Acceptance Model (TAM) to examine millennial acceptance of robo-advisors, paying particular attention to financial Knowledge, perceived usability, and trust. 78 Gujarati millennials, born between 1981 and 1996, participated in a quantitative survey. The results show that while perceived usability was not a significant factor, financial knowledge and trust had a substantial impact on millennials' propensity to accept robo-advisors, suggesting that this generation might not be motivated to adopt based solely on ease of use. As robo-advisors continue to evolve, they face challenges such as navigating complex regulatory landscapes and addressing consumer concerns about data privacy and algorithmic transparency. Despite these hurdles, their role in modern financial planning is poised to expand, driven by growing consumer trust in digital solutions and the increasing sophistication of AI technologies. The millennials value reliable platforms and sufficient financial knowledge more than usability when it comes to digital wealth management tools. Overall, focusing on strategies that foster knowledge and trust can empower Indian millennials to make informed financial decisions, driving greater engagement with robo-advice platforms and fostering a more digitally inclusive financial ecosystem.